Productize - Eisha Armstrong

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Here is a summary of the praise and endorsements for the book Productize:

• The book provides a valuable blueprint for professional services companies looking to scale beyond one-time services by developing products from their IP and expertise.

• It identifies common mistakes in productization and offers a clear pathway and roadmap to avoid these mistakes. A key challenge it addresses is overcoming resistance from legacy teams and culture.

• Productize is a hands-on guide that can be used by leadership teams to study, discuss, and apply the tools to bring growth ideas to life. It provides frameworks as well as sound advice.

• It presents a must-read playbook for any services business that wants to scale while complementing their existing business with new products. Includes case studies and tools for teams.

• Scaling is difficult for professional services, but Productize offers a handbook for creating successful products that allow growth without proportionate cost increases and without risking the core business.

• For anyone leading product initiatives, this book will save time and resources by guiding them around common pitfalls.

• In the coming decade, product development will be a key capability as businesses scale and compete. The book provides a practical and insightful roadmap for executives.

In summary, the endorsements praise Productize for providing an actionable blueprint and roadmap to help professional services firms develop scalable products and successfully scale their businesses through productization. It addresses common challenges and offers real-world tools and examples.

• The book is aimed at helping professional services firms like consulting, accounting, marketing agencies etc. transition to more scalable and tech-enabled product models to drive recurring revenue growth.

• It discusses common challenges these firms face in innovating new products and provides a six-part framework the author developed to guide the productization journey.

• Products are defined as scalable, often tech-enabled tools or programs that can be packaged and sold like off-the-shelf items with predefined features.

• An innovation ladder is presented mapping the progression from customized consulting services to products delivered as a subscription service.

• Three core ingredients of successful products are outlined - intellectual property, technology, and services. The mix varies based on whether creating a productized service, product, or product as a service.

• Benefits of adopting a product innovation strategy include scaling revenue growth faster without linear cost increases, improving profit margins, creating recurring revenue streams, and building company valuation.

• The book aims to provide tools and templates to help firms implement strategies discussed and avoid common mistakes in transitioning to more product-led models.

• Developing products and services can help professional services firms improve profit margins, revenue visibility, and valuations compared to traditional consulting models. Products typically have gross margins of 60-90% vs 40% for services.

• Subscription/recurring revenue models provide more predictable revenue streams that buyers and sellers both value. This improves revenue visibility.

• Product and subscription companies can receive valuations 8x revenue, much higher than traditional consulting firms at 1x revenue.

• Technology enables services to be delivered virtually and at scale, meeting evolving customer demands accelerated by COVID-19. Automation further aids scaling.

• Increased competition comes from digital startups providing services alongside proprietary products/platforms. This disrupts traditional consulting firms.

• Key vulnerabilities include heavy reliance on human labor/expertise and inability to effectively digitize offerings beyond video calls.

• Changes in B2B purchasing now mirror B2C preferences for immediate online transactions versus lengthy sales cycles. Products allow easier initial customer relationships.

• The traditional services model makes it difficult to retain top talent and plan for growth. Productization addresses this.

• Many companies had to accelerate their digital transformation plans during the COVID-19 pandemic, completing projects that usually take 2 years in just 2 months.

• Remote work became the norm essentially overnight, forcing companies to quickly adopt collaboration tools and migrate systems to the cloud.

• Digital customer interactions like e-commerce, telehealth, online learning saw massive spikes in usage as people adjusted to lockdowns and social distancing.

• Companies had to rapidly build out online capability for things like order processing, payment systems, and delivery/pickup options to meet surging demand.

• Security and network infrastructure also needed rapid upgrades to support the influx of remote users and changes in traffic patterns caused by the shift to digital.

• While a stressful change, the pandemic highlighted for many companies the importance and benefits of digital tools for business continuity, flexibility, and engaging customers throughout any disruption. It’s likely accelerated long term digital transformation plans by several years for many industries.

• Fully committing resources to product development and launch is important for success, rather than taking a piecemeal approach. This may require changing shareholder expectations around allocating 5-20% of revenue to new product investments.

• Companies need flexibility in how they assess and manage new products, using metrics like ideas generated, on-schedule launches, and customer growth rather than just current revenue. Focusing only on current revenue does not spur innovation.

• Developing solutions without solving an urgent and expensive customer problem is a mistake. Problems need to be validated as truly painful rather than just frequently cited.

• Designing and developing products in isolation without customer input leads to failure. Co-creation with customers and other stakeholders during the whole process leads to more success.

• Fear of cannibalizing existing higher-priced services leads companies to starve new products. But competitors will disrupt if companies do not cannibalize themselves first.

• Minimum viable products (MVPs) are only helpful if companies commit to continuing development after launch rather than stopping at the MVP stage. Ongoing evolution is needed.

• The article discusses an approach called the “Productize Pathway” for businesses to develop products in an iterative way starting small rather than trying to build the perfect product from the beginning.

• It advocates following Lean Startup principles of building-measuring-learning loops to continuously improve products based on customer feedback.

• Key steps in the Productize Pathway include aligning resources, understanding customer problems, co-designing with customers, launching MVPs, and iterating based on feedback.

• This approach is designed to help services firms overcome challenges to product development like skills gaps, lack of alignment, and fears of cannibalizing existing business.

• The article argues this approach can help avoid common “Seven Deadly Productization Mistakes” like starting too big, focusing on the wrong problems, and not iterating based on customer feedback from MVP launches.

• It advocates thinking big but starting small through running many small experiments to build toward a larger product vision over time in an iterative way.

So in summary, it presents the Productize Pathway as a framework for businesses, particularly services firms, to develop products in a lean, customer-focused and iterative manner to avoid common pitfalls.

Here is a summary of key points from the passage on processes before people:

• Focusing on people over processes is central to building successful products. Creating a product-friendly culture is represented at the center of the Productize Pathway.

• Dedicate people solely focused on product innovation and provide sufficient resources for test-and-learn development. Prioritize creativity and innovation.

• Create a strong, well-articulated vision for the organizational change and drive behavior change from the top down through commitment and change management.

• Hire or develop the right skills like product management, technology, strategy, design, business, and development. Diversity of experience and thought is important.

• Structure the organization to facilitate collaboration and agility. Foster a test-and-learn mindset.

• Examples are given of companies like Relevate and Linkage that successfully shifted through vision, behavior change, skill development, and culture change centered around people.

• Key behaviors to focus on include asking questions/bringing ideas, blameless problem solving, and staying open to change.

• Successful sales and commercial acumen to ensure customers, prospects and staff are aware of and engaged with products.

• Analyze product usage data through analytics to understand how products are being used.

• Manage products by ensuring customers, prospects and staff are trained on products and changes to products.

• Soft skills like communication, problem solving and executing are also important for product roles. People who can work with uncertainty are valued.

• Don’t promote people just because they have subject matter expertise - they may not have the right product skills. Hire external candidates with product experience.

• Diverse teams in terms of gender, ethnicity, age etc. often lead to better products through diverse perspectives. Invest in training leaders on inclusivity.

• Organizational structures need to facilitate collaboration across functions through structures like squads or multi-functional teams.

• Develop company-wide technical acumen or “digital fluency” through training and tool usage.

• Adopt a test-and-learn mindset through MVPs, testing hypotheses, gathering data and adapting iteratively based on learnings.

• A recent survey found several benefits of the test-and-learn product design approach: faster cycle time, decisions based on data not instincts, better customer feedback, direct customer observations, flexibility to make changes.

• Adopting a test-and-learn approach requires changing what “done” looks like and building capabilities for rapid customer feedback and product evolution. Outside help can be beneficial for altering company culture.

• When transitioning to a product strategy, it is important to align the executive team, determine budgets for investing in new products, decide how to allocate investments, free up resources from existing businesses, and align incentives around product goals.

• Getting shareholders and executives aligned on a new product vision is critical. This may require difficult discussions and some partners choosing to leave.

• As a starting point, 2-3% of revenue can be invested in exploring market needs and testing early product hypotheses. Successful companies fund product development primarily from profits.

• Companies adopting a productization strategy typically allocate 10-30% of revenue to their innovation budget. The size depends on how much digital disruption the company faces.

• The effectiveness of spending, not the size, determines innovation success.

• When evaluating new product ideas, companies establish criteria like revenue potential, payback period, ability to acquire new customers. Clear definitions are important.

• A simple framework assesses Revenue, Confidence in estimates, and Effort required. Ideas are scored and prioritized.

• Companies allocate funding between “easy win” ideas and more strategic, transformational innovations. Best innovators spend 37% on transformational ideas.

• Progress is regularly reviewed to reallocate funds to most promising ideas.

• Choosing an axis of growth like industry or function supports scalable products with large enough target markets. Needs must be common across customers.

• Reducing customization of existing products and engagements frees up resources for new product development. This is a key challenge companies face.

• The customer needs to have an urgent and expensive problem for a new product to solve. Minor annoyances are not enough.

• Understanding customers and their problems is important before developing a new product. This includes understanding different customer segments and personas.

• Companies often develop products without properly understanding customer needs, copying competitors without verification, or solving symptoms instead of root causes.

• Products should solve important “jobs to be done” for customers, not just common minor problems. The job needs to be one that is urgent and expensive for the customer.

• Existing IP or current solutions should not dictate the new product without validation that it solves a true customer problem. Assumptions can lead to failures like New Coke.

• Processes like defining the problem specifically help avoid developing products customers do not want or need. Understanding the problem from the customer perspective is key to successful new product development.

• Theodore Levitt’s idea that customers want results, not products, is cited. For example, customers want a hole in the wall, not necessarily a better drill.

• Similarly, when cars were invented, people stopped buying horses/buggies because cars better solved their transportation needs, not because cars were faster.

• Uber and Lyft disrupted car companies by solving the transportation problem without relying on car ownership.

• It’s important to understand the root problem customers are trying to solve, not just surface-level symptoms, in order to develop an effective solution.

• A hypothesis-driven research approach is recommended to understand customer needs and how competitors address those needs. This includes developing hypotheses, understanding the competitive landscape, and testing hypotheses through customer interviews, surveys, etc.

• Competitors not only include traditional companies but any obstacles that make it harder for customers to solve their problems, like healthy vs. junk food.

• Conducting in-depth competitive analysis provides insights into strengths, weaknesses, and opportunities in the market.

Here is a summary of key points from the provided text:

Customer perspective:

• Price: Willingness to pay for a solution and preferences for pricing/packaging.
• Quality: How well solutions currently work and effectiveness in addressing problems/needs.
• Delivery: Preferences for how solutions are delivered (e.g. virtual vs in-person).
• Ease of use: Usability and simplicity of solutions. How easily customers can implement solutions.

New product launches: Gathering customer feedback is important before and during new product launches to ensure solutions address real problems and are designed/delivered in a way customers want. Customer interviews, advisory boards, and surveys can validate market potential and gather data for marketing.

Marketing strategies: Understanding effective content channels (e.g. email, social media, events) and ensuring content quality/messaging resonates with target audiences. Customer feedback helps inform marketing strategy and positioning of products/solutions.

The key steps described are: 1) Develop hypotheses about customer problems/needs, 2) Refine hypotheses by researching competitive landscape, and 3) Test hypotheses through interviews, advisory boards, surveys, and analytics to validate problems and gather feedback on potential solutions before launching products. Overall the focus is on deeply understanding problems from the customer perspective to develop valuable and usable solutions.

• Peers were benchmarking their own pandemic responses to increase survey response rates. It helps to clearly inform respondents how long a survey will take upfront.

• When designing surveys, it’s important to ask only critical “must have” questions since follow ups are not possible like in interviews. Pare down questions to only essential info.

• Consider user experience factors like length, question types, design, instructions to improve usability and reduce drop off rates. Surveys should generally take less than 10 minutes.

• Word questions for the intended audience, avoiding internal jargon. Consider language proficiency and knowledge level of respondents.

• Test hypotheses through online data like social media monitoring and search term analysis to identify trends and customer insights.

• Analyze existing product data like customer demographics, popular features, pricing and discounts, financials, engagement types and components to inform new product development.

• The key is to define problems clearly based on customer input, then co-design and develop solutions by iterating with customers, employees, and developers throughout the process. Catalog existing intellectual property and data as a starting point for new product ideas.

• Develop groups based on consumer insights by category, ads, and brands to understand different demographic audiences.

• Create a ranking system for brands and ads that measures their “cultural fluency” or relevance for different segments. This motivates brands to improve in areas where they are lacking.

• Products initially seen as “nice to have” can become “need to have” when brands increase their cultural fluency based on consumer insight.

• Subscribing brands can use the rankings to identify gaps and use related content to strengthen their cultural fluency over time.

• The goals are to better connect with diverse audiences and drive competition among category competitors to improve.

A good revenue culture framework should:

1. Help assess the current state (e.g. weaknesses or disconnects)

2. Articulate the ideal future state (e.g. strong connections to audiences)

3. Provide a roadmap to go from current to ideal state

Some key ways to generate and test new product ideas include:

• Looking for opportunities to automate existing processes

• Developing complementary or adjacent products/services

• Gathering inspiration from other solutions

• Quickly testing concepts through interviews/surveys, co-creation boards, MVP prototypes

The overall idea is to use consumer insights, ranking systems and competition to motivate brands to continuously improve their cultural fluency and relevance for different audiences over time.

• When testing pricing, avoid directly asking customers what they would pay and instead ask what they pay for similar existing products. 12 concept testing interviews is usually enough to gather initial feedback.

• If the product has a user interface, involve a UX designer at this stage to create mockups. Good design is important to avoid confusing or unattractive products.

• LEGO has successfully used a co-creation approach called LEGO Ideas, where fans submit and vote on new kit ideas. This engages customers and results in bestselling products.

• Charter advisory boards are another co-creation tactic where select customers advise on the problem and solution in exchange for early access/pricing. They can co-fund development or simply provide advice then purchase. This engages customers and improves the product fit.

• When testing concepts, simply asking questions is not enough - hypotheses need real market tests using minimum viable products to validate customer interest and actions beyond just words.

Here is a summary of the key points about different types of pre-development MVPs:

• Sell-then-build: Test market demand by selling the product concept first (e.g. through a landing page or Kickstarter) before actually building the product. Collect pre-orders, feedback, and learn which features are most important.

• Wizard of Oz testing: Manually simulate what the product could do to get early feedback, without fully developing the system. The Zappos example showed simulating an online shoe store this way before building technical infrastructure.

• Concierge testing: Provide the product in beta form to a small group, with the developers manually assisting. This lets users experience the product while getting feedback, as Rent the Runway did with their early renting tests.

• The goal of these methods is to test the authentic demand and engagement of real customers early, before significant resources are spent on development. They allow for rapid iteration to find the most effective solution based on learning what customers need and want.

• Co-design and co-development with customers and developers are important, seeing them as partners rather than just handing them requirements.

• Share the product strategy document outlining vision, customers, problem/solution, and objectives with developers and designers so they understand the goals.

• Outline desired product features, the customer problem each solves, and priority (first iteration, later, etc.). This list will evolve.

• Consider hiring in-house vs contracting developers. Contracting is more flexible initially but offers less control. Important to own the code/work when contracting.

• When working with developers, learn basic concepts, ask for estimates on new features, invite them to co-create solutions, and expect timelines to extend.

• Continuously test with users through various methods like interviews, focus groups, A/B testing, and observe to collect feedback on meeting needs and usability. Only need 3-5 users typically.

• Testing should involve actual use, not just discussion. Test throughout development to iterate based on learnings. Represent target personas.

In other words, co-design and co-development require involving customers and developers as partners throughout the process to build the right product. Continuous user testing is also crucial for informed iteration.

Here is a summary of the quote:

Theodore Roosevelt advises against being a “cold and timid” soul who is unwilling to take risks or make difficult choices that involve either victory or defeat. Rather than avoiding challenging situations where one might fail or succeed, Roosevelt encourages embracing risk, daring greatly, and being willing to face both potential victory and potential defeat through courageous action. He sees avoiding risk as a sign of weakness and celebrating fearlessness as a virtue.

• The passage discusses the freemium business model, where a basic/limited version of a product or service is offered for free to attract customers. As customers’ needs grow, they are upsold to paid premium versions.

• Zapier and Hanover Research are used as examples of companies that use this model. Zapier offers a free basic account that then upgrades to paid as usage increases. Hanover provides free educational content to attract customers and then charges for deeper analyses.

• The freemium model lowers barriers for customers to try the product and see its value before paying. It also acts as a market test to see what pricing tiers are most popular.

• When pricing a freemium product, options beyond just free and paid versions can be considered, like free/premium/pro tiers. Pricing should reflect the actual value provided.

• Selling products requires developing effective messaging around the value proposition. This should focus on benefits beyond just the product itself and articulate how it fulfills customer needs/goals. Case studies can help tell compelling stories.

• A multi-channel marketing plan is needed to reach customers across different platforms. Tactics will vary depending on awareness versus consideration phases.

• Developing an effective sales strategy is challenging when transitioning from consulting to products. Products require different economics and sales approaches. Existing sales teams may need training or separate product sales teams may be needed.

• The organization provides products and services that support its mission and vision. There is a commercial relationship between products and services - products enable or enhance the value of services, and services support effective use of products.

• It is important to clearly explain the value proposition of both existing and new offerings to clients and customers. These explanations need to happen regularly through ongoing conversations.

• When introducing a new product or service, the sales team needs to understand what is being offered and why it is valuable. They need contextual background on the problem it solves and market research.

• Customers should be informed that the initial offering is not final and will evolve based on feedback. The product roadmap should be transparent.

• Sales feedback during product development helps ensure the sales team understands and can effectively promote the offerings.

• Collateral like demos, presentations, documentation equip the sales team and build confidence.

• Incentives should motivate selling the new offerings alongside existing ones to maximize their value and avoid cannibalization.

• Managing the customer lifecycle, including onboarding, success processes and measuring performance, is important for optimizing renewals, expansion and generating feedback.

The key is to develop a clear and ongoing approach to educate the sales team and customers on the organization’s portfolio of products and services, and how they interconnect to solve problems and create value at each stage of the customer relationship.

• Early live event attendance in the first 3 months of launching a new product or service is considered a good “One Metric that Matters” (OMTM) for measuring early success.

• A classic example of an effective OMTM is Facebook’s metric that measures how many friends a new user connects with within their first 10 days - users who meet this metric are much more likely to become active, long-term users.

• To understand why a product is performing well or poorly, companies need to regularly evaluate the original hypotheses about the product and test them, not just look at specific feature performance. This includes evaluating factors like how and why customers use the product, what benefits they receive, etc.

• Regularly reviewing customer usage data and feedback provides insights into whether customers will continue using the product and why, helping the company understand what’s driving product performance.

• The summary focuses on the importance of tracking key metrics and customer feedback to evaluate product hypotheses and understand what’s driving success or lack thereof, in order to inform ongoing improvements and ensure the product continues meeting business goals.

The passage discusses principles to keep in mind when going on a productization journey. It suggests thinking big but starting small by taking a productize pathway rather than launching products that are too big or perfect. It also recommends focusing on creating a product-friendly culture before processes. Companies should also align to support innovation rather than favor core businesses. Products should solve urgent and expensive problems for customers by defining the right problem through co-design and development. Fears of cannibalization should not hinder bold launches and MVPs should be iterated on rather than just stopping there. Following these principles can help increase success on the productization journey.